After an initial interval, the basic disequilibrating tendencies of capitalist finance will once gain push the financial structure to the brink of fragility. When that occurs, a new era of reform will be needed. There is no possibility that we can ever set things right once for all; instability, put to rest by one set of reforms will, after time, emerge in a new guise. (Stabilizing an Unstable Economy, 1986)Minsky argued that we need to reject failed models of how the economy works and deal with reality. Part of that is to be constantly vigilant. Nevertheless, reforms do require political leadership. This is something we are seeing in the UK.
This piece in tomorrow's FT is worth reading (excerpt and link to the rest below).
Is there time to avert a Minsky meltdown?FT.com / Comment & analysis / Comment - Is there time to avert a Minsky meltdown?
By George Magnus
Published: October 13 2008 18:03 | Last updated: October 13 2008 18:03
The point at which a Minsky moment becomes a Minsky meltdown has arrived. Named after the economist, Hyman Minsky, this is the point where financial instability has become so acute that only an exceptional, immediate and global government attack on the causes of instability is likely to avert a systemic banking failure, in which non-financial companies could rapidly fail too. The Group of Seven leading industrialised nations and the European Union now look like they “get it”, but with several hundred billion dollars of debt to be rolled over in the coming weeks, the question is whether they have the time to “do it” too.